Business leader Khurram Ijaz calls for affordable financing as rising energy costs and a widening trade deficit pressure Pakistan’s businesses.
KARACHI, September 14, 2026: Khurram Ijaz, General Secretary of the Businessmen Panel Progressive (BMPP) and former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has urged the State Bank of Pakistan (SBP) to maintain an affordable policy interest rate to support trade, industry and investment.
With the SBP scheduled to announce its monetary policy decision today, Khurram Ijaz said the central bank should carefully assess growing cost pressures facing businesses, particularly rising energy and petroleum prices, before considering any further increase in the policy rate.
Business financing costs remain a concern
Khurram Ijaz said the SBP had previously kept the policy rate at a record 22 per cent before gradually reducing it to 10.50 per cent, providing relief to businesses and borrowers.
However, the subsequent increase to 11.50 per cent had once again created challenges for the business community by raising financing costs, he said.
According to Khurram Ijaz, recent banking data also showed growing caution among businesses.
Private-sector borrowers repaid around Rs370 billion in bank loans during July and August 2026, compared with approximately Rs214 billion during the corresponding period of FY2025-26.
He said the sharp rise in loan repayments indicated that businesses were becoming increasingly reluctant to take on fresh debt amid uncertainty over interest rates, inflation, energy prices and the broader economic outlook.
“Businesses need affordable financing to expand production, create employment and increase exports. A higher interest rate at this stage could further discourage private-sector investment and borrowing,” he said.
Higher rates could discourage investment
Khurram Ijaz pointed out that private-sector borrowing reached around Rs1.41 trillion in FY2025-26, compared with Rs1.08 trillion in FY2024-25.
He said the figures demonstrated the importance of relatively lower financing costs in supporting economic activity.
He warned that higher petroleum and energy prices were already increasing production, transportation and operating costs for businesses.
Pakistan was facing comparatively high energy costs in the region, he said, making it increasingly difficult for industries to remain competitive in both domestic and international markets.
Trade deficit widens
Khurram Ijaz also highlighted Pakistan’s deteriorating trade balance, saying the trade deficit widened by 18.11 per cent year-on-year to $7.12 billion during July-August 2026.
Imports increased by 13.03 per cent to $12.58 billion, while exports rose by only 7.04 per cent to $5.46 billion.
He said the widening trade deficit required urgent measures to strengthen exports and industrial competitiveness rather than policies that could further increase the cost of doing business.
Call for balanced monetary policy
Khurram Ijaz urged the SBP to adopt a balanced monetary policy that controls inflation without undermining economic growth, industrial expansion and private-sector investment.
“The business community needs stability, predictability and affordable financing. Any further increase in the interest rate would make the business environment more difficult at a time when industries are already facing high energy, petroleum and operational costs,” he said.
He called for coordinated measures by the government and the central bank to reduce the cost of doing business, promote private-sector credit, encourage investment and improve Pakistan’s export competitiveness.
Khurram Ijaz stressed that monetary policy should support sustainable economic growth while inflationary pressures are addressed through broader structural and supply-side measures rather than placing the entire burden on businesses through higher borrowing costs.